Factoring in inflation, duty on alcohol in the UK will rise by 5% from midnight on Sunday

The UK drinks industry has come out in force against today's UK Budget, which sees a continuation of the alcohol duty escalator.

Earlier today (21 March), the Chancellor of the Exchequer, George Osborne, delivered his Budget speech and confirmed that the Government would continue with the duty escalator. Subsequently, duty on alcohol will rise by 2% above the rate of inflation from midnight on Sunday.

The move will see duty on a 70cl bottle of spirits increase by GBP0.41, with GBP0.11 going on a 75cl bottle of wine and GBP0.03 on a pint of beer.

The interim chief executive of the Wine & Spirit Trade Association, Gavin Partington, led the way, accusing the Government of introducing a “duty burden” that is “holding (the sector) back from contributing fully to the UK's economic recovery.

“Consumers and businesses are already paying the price for the excessive duty increases in recent years and today's news means more price rises are on the way,” Partington said.

The chairman of the British Beer & Pubs Association, and chief executive of Molson Coors' UK unit, Mark Hunter, echoed the sentiment. “There are no winners from the beer duty escalator,” he said. "The ‘escalator’ has lost all sense of proportion and logic: Beer drinkers in Britain already pay a whopping 40% of all European beer tax and yet drink only 13% of the beer. We are disappointed that the government has chosen not to end this crippling policy.”

Kate Nicholls, the strategic affairs direct at the Association of Licensed Multiple Retailers, joined the chorus: “We needed the additional costs and burdens of today’s Budget like a hole in the head, she said. “Operators were already warning that the UK’s tax regime for pubs and bars is threatening investment and the Budget has done nothing to address that.

“We are still at a competitive disadvantage – with supermarkets using their tax free status on food to subsidise loss-leading and pocket money pricing of alcohol.”

The Chancellor also passed mention of the Government's imminent alcohol strategy, although no specific measures were alluded to.